After several sessions of trying to "pull back", the sharp decline of the VN-Index in the last two sessions of the week has caused all hopes of a recovery at the hard support zone of 1,240 points to disappear.
The VN30 group of stocks is a major factor causing the general market correction. Large stock groups such as banks, securities, steel... continuously decreased sharply, causing panic in the market.
Foreign investors' net selling continues to be a worrying issue for the domestic stock market, as this group has net sold nearly VND4,000 billion in total over the past week. The large net selling sessions in a not-so-high liquidity level have strongly impacted both the index and market sentiment. Foreign money flows seem to be reacting strongly to the recent increase in exchange rates and show no signs of stopping.
Liquidity last week was higher than the previous week, with about 3 billion shares matched, reaching the 20-session average when looking at the weekly chart of the VN-Index. However, if only looking at the daily chart, the market has not had any session with too much sudden change in liquidity. This is reflected in the lack of interest in bottom-fishing.
In the context of concerns about the exchange rate continuing to climb, approaching the peak of the last 2 years, it is clear that cash flow on the stock market is also negatively affected, except for businesses with strong export capabilities and recording exchange rate gains thanks to profits earned in USD. Unfortunately, these are all stocks in the mid- and small-cap group, so it is difficult to support the market at this time.
The VN-Index has broken through many important support levels in the past 3 months, from 1,270, 1,250 to 1,230 points, mainly due to concerns about macroeconomic instability at the end of the year and possibly from 2025. This has made investors increasingly cautious, with selling pressure increasing to protect their accounts in the absence of clear supporting factors.
The stock market will likely experience technical recovery sessions right at 1,230 points or at deeper support zones such as 1,180-1,200 points, especially when selling pressure shows signs of overextension.
At the same time, market valuations are becoming attractive as P/E approaches the lowest level since the beginning of the year, while the third quarter 2024 profits of many businesses still record positive recovery.
Although external factors create significant pressure, increasing market sentiment, this could also be an opportunity for investors to observe and select oversold stocks with stable prospects in the period of 2024-2025. Bottom fishing at this time requires caution and prioritizing stocks with good fundamentals, which will be quite risky for swing traders when the short-term trend of the market is still down.
